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The Financial Report February 25, 2016 - News from Europe

FCA discussion paper focuses on financial services and the aging population. The UK Financial Conduct Authority requested comments on a discussion paper that seeks to make recommendations regarding best practices and potential approaches to adapting financial products and services to meet the needs of older investors. Comments are due on or before April 15, 2016. (2/22/2016) FCA press release.

ESMA updates Public Register to include category 1 clearing members. The European Securities and Markets Authority revised its Public Register for the Clearing Obligation to include an updated list of category 1 clearing members, which will be the first firms to start the central clearing of certain types of derivatives products in June, under the European Market Infrastructure Regulation (EMIR). (2/19/2016) ESMA press release.

PRA finalizes approach to identifying O-SIIs. The Prudential Regulation Authority published a policy statement that responds to the feedback it received regarding its proposed approach to identifying other systemically important institutions. The policy statement clarifies the source of the data the PRA will use to calculate the mandatory score. The PRA released a Statement of Policy alongside the policy statement that establishes the criteria and scoring methodology for identifying O-SIIs. (2/19/2016)

FCA finds advisory firms need to apply due diligence practices more consistently. The FCA published the findings of its review of the research and due diligence processes conducted by advisory firms when making recommendations to retail clients. The report concluded that most firms demonstrated good practices on the due diligence they conducted on many of the products and services they recommended, but those practices did not extend consistently to all products and services. (2/19/2016) FCA press release.

FCA consults on new guidance on enforcing security under the Consumer Credit Act. The FCA requested comments on a guidance consultation that proposes to issue new guidance regarding the way in which the FCA will enforce security in relation to a regulated credit agreement or a regulated consumer hire agreement under the Consumer Credit Act 1974. Comments are due on or before March 18, 2016. (2/19/2016) FCA press release.

FCA seeks input on review of retained provisions of the Consumer Credit Act.The FCA issued a Call for Input regarding its review of provisions of the Consumer Credit Act 1974 to determine if the provisions should be modified, updated, or replaced to reduce burdens on firms while maintaining an appropriate degree of consumer protections. Comments are due on or before May 18, 2016. (2/18/2016) FCA press release.

ESMA revises Q&As on EMIR. ESMA updated its questions and answers regarding the implementation of EMIR to clarify how the clearing obligations should apply to swaps resulting for the exercise of a swaption. (2/16/2016) ESMA press release.

ESMA conducts follow-up review of NCAs’ compliance with money market fund guidelines. ESMA published a follow-up peer review regarding compliance with the money market fund guidelines by national competent authorities (NCAs) in eight countries that were found not in compliance during an earlier review. The follow-up peer review assessment found that seven of the eight NCAs are now in compliance with the guidelines. (2/16/2016) ESMA press release.

ESMA consultation on implementation of the Benchmarks Regulation. ESMA published a discussion paper that seeks input on the implementation of the technical aspects of the Benchmarks Regulation, including the definition of benchmarks; requirements for benchmark oversight function and data input; governance and control requirements for supervised benchmark contributors; authorization and registration of an administrator; and transparency requirements for benchmark methodology. Comments are due on or before March 31, 2016. (2/15/2016) ESMA press release.

EBA final draft ITS on mapping of ECAIs’ credit assessments for securitization positions. The European Banking Authority released final draft Implementing Technical Standards regarding the mapping of External Credit Assessment Institutions’ credit assessments for securitization positions, which will assist in determining the allocation of risk weights to credit ratings on securitizations in the calculation of capital requirements by institutions. (2/15/2016) EBA press release.

EBA releases Guidelines on standards of cooperation agreements between deposit guarantee schemes in the EU. The EBA issued final Guidelines on cooperation agreements between deposit guarantee schemes, which establish the objectives and minimum content to be included in cooperation agreements to increase consistency and depositor protections. (2/15/2016) EBA press release.

BOE consults on proposals for Shari’ah compliant liquidity facilities. The Bank of England published a consultation paper that proposes potential models to assist firms that cannot engage in interest-bearing activities in meeting and managing their liquidity requirements to serve as the basis for Shari’ah compliant central bank liquidity facilities. Comments are due on or before April 29, 2016. (2/12/2016) BOE press release.

ESMA Open Hearing on MAR guidelines for market soundings and delayed disclosure of inside information. ESMA will hold an Open Hearing on February 29, 2016, on its consultation paper containing draft guidelines regarding market soundings and the delayed disclosure of inside information under the Market Abuse Regulation. (2/12/2016) ESMA press release.

British regulators consult on changes to Complaints Scheme. The BOE, the FCA, and the PRA published a joint consultation paper that would amend the Complaints Scheme, which investigates complaints against the regulators, to incorporate more detailed requirements for the annual report prepared by the Complaints Commissioner regarding investigations of complaints. Comments are due on or before March 9, 2016. (2/11/2016) PRA press release.

ESMA details plan for supervisory convergence work during 2016. ESMA released its first Supervisory Convergence Work Programme, which specifies the priority areas as well as the activities and tasks it will undertake during 2016 to carry out its work on supervisory convergence. (2/11/2016) ESMA press release.

Responses to ESMA consultation on access, aggregation and comparison of TR data. ESMA published the feedback it received to its consultation paper regarding access, aggregation, and comparison of trading repository data. (2/10/2016) ESMA press release.

Responses to European regulators’ consultation paper on PRIIPs Key Information Documents. ESMA published the responses it received to its joint consultation with the EBA and the European Insurance and Occupational Pensions Authority on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs) under the PRIIPs Regulation. (2/10/2016) ESMA press release.

European Commission delays application date of MiFID II by one year. The European Commission announced that it has extended the deadline for NCAs and market participants to comply with the revised Markets in Financial Instruments Directive (MiFID II) until January 3, 2018. (2/10/2016) EC press release.

ESMA restarts recognition process for US CCPs. Following the announcement of an agreement between the European Commission and the CFTC regarding the equivalence of CCP regimes, ESMA announced that it will begin the recognition process of specific CFTC-supervised US CCPs that have applied for recognition in the EU and indicated it would take measures to expedite the recognition period for US-applicant CCPs that meet the conditions specified in the equivalence decisions. (2/10/2016) ESMA press release.

EBA objects to European Commission’s proposed changes to MREL technical standards. The EBA published an Opinion regarding the European Commission’s proposed amendments to the EBA’s final draft Regulatory Technical Standards on the criteria for setting the minimum requirement for own funds and eligible liabilities (MREL). In the Opinion, the EBA dissented from the Commission’s proposed amendments to the burden-sharing requirement by shareholders and creditors of institutions of significant importance, the criteria for setting MREL for systemic institutions, the consultation between competent and resolution authorities, and the upper limit on the transitional compliance period. (2/9/2016) EBA press release.